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Why Early Collective Action Pays Off: Evidence from Setting Protected Geographical Indications

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Why Early Collective Action Pays Off: Evidence from Setting Protected Geographical Indications Renewable Agriculture and Food Systems: 32(2); 179–192 doi:10.1017/S1742170516000168 Why early collective action pays off: evidence from setting Protected Geographical Indications Xiomara F. Quiñones-Ruiz1*, Marianne Penker1, Giovanni Belletti2, Andrea Marescotti2 and Silvia Scaramuzzi2 1 Department of Economics and Social Sciences, University of Natural Resources and Life Sciences, Vienna (BOKU), Austria. 2 Dipartimento di Scienze per l’Economia e l’Impresa, Università di Firenze. *Corresponding author: [email protected] Accepted 4 April 2016; First published online 22 June 2016 Research Paper Abstract The registration of Geographical Indications (GIs) under the European Union (EU) legislation requires collective action and considerable efforts borne by multiple actors such as producers, processors, public authorities and research centers. We analyze their efforts, risks and benefits by comparing two EU GI registration processes in Italy and Austria, namely the Sorana bean Protected Geographical Indication (PGI) and the Perry from Mostviertel PGI. Results from the insti- tutional and transaction costs analysis suggest that intensive interaction for solving conflicting interests, negotiating quality standards and defining common rules might pay off in indirect benefits and reduced risks. In particular, an in- clusion of diverse and heterogeneous interest groups and a high degree of direct enterprise participation along the GI application process (as observed in the Italian case) generate benefits such as trust and social cohesion, which then support the actual use of the GI label and a better implementation of associated quality standards. A supportive legal framework with assistance from public authorities can back up the community of producers not only in technical aspects, but also as mediators when conflicts seem to be difficult to solve. As there seems to be a positive relationship between the intensity and effectiveness of collective action and the likelihood of achieving broadly accepted standards and social cohesion needed for successful GI implementation, the question for future research would not be how to avoid collective efforts but how to effectively organize the interaction among heterogeneous producer groups. Key words: geographical indication, protected geographical indication, collective action, registration, efforts, benefits, risks, EU Introduction Due to heterogeneous interests of producers and proces- sors diverging in size, location and quality standards, Geographical Indications (GIs) allow producers to define mutual agreements (Paus and Reviron, 2010;Galtier quality standards and defend their food products’ repu- et al., 2013) have to be reached. This requires considerable tation, while highlighting their geographical origin, collective efforts on the meso-level (Vandecandelaere et al., local skills and value to consumers. For the registration 2009). We assume that the interaction of GI enterprises will of a GI within the European Union (EU) scheme, initial- be shaped by formal and informal institutions (Reviron and ly set up by EU Council Regulation 2081/1992 (now Chappuis, 2011; Sidali and Scaramuzzi, 2014). The Regulation 1151/2012), local producers and processors European legal framework provides the overall regulatory have to organize and collectively define the area of pro- structures for GI registration; however, there is some duction, the characteristics of the production process scope for national specifications (e.g., requirements, proce- and those of the final product. These common rules are dures and authorities responsible for the national analysis summarizedintheso-calledProductSpecification, of dossiers). We assume that the way EU states design which is essential for the application to the EU. Once and organize the national phase of the GI registration EU recognition is obtained, GIs in EU territory will process is relevant, e.g., top-down processes often result in be used only for products complying with Product low ex-ante efforts and high ex-post efforts, while participa- Specification. tory processes usually have high ex-ante and low ex-post © Cambridge University Press 2016 Downloaded from https://www.cambridge.org/core. 28 Sep 2021 at 23:36:10, subject to the Cambridge Core terms of use. 180 X.F. Quiñones-Ruiz et al. efforts (Hanna, 1994, 1995; Jena and Grote, 2010); add- natural or human systems that generate limited benefits itionally, very weak cooperation or too centralized manage- and are challenged by over-exploitation and free-riding ment might not be efficiently run collective organizations (Ostrom et al., 1994). Collective efforts to build up and (Hanna, 1995). Furthermore, efforts made for information sustain product quality, clear rules, considerable monitor- gathering and for other forms of interaction can also result ing and sanctioning efforts are needed to maintain the GI in transaction benefits (Hanna, 1995; Enengel et al., 2014) reputation and to effectively exclude illegitimate users. that surpass the efforts made to obtain the GI registration. Producers that are located in the defined GI area and However, the governance of participatory group processes comply with the product specification are allowed to also bears risks, such as unsolvable conflicts (Hanna, benefit from the reputation of protected GIs (Babcock 1994; Enengel et al., 2014; Sidali and Scaramuzzi, 2014). and Clemens, 2004; Biénabe et al., 2011). Reviron and Chappuis (2011) explain the importance The collective action in diverse GI production systems of collective organization in the European vision of is shaped by GI firms’ own formal and informal rules Protected Geographical Indications (PGI) and Protected (e.g., rules of producer organizations, conventions of pro- Designations of Origin (PDO). However, there is yet very duction) and by the formal legal context, in which the de- little literature scrutinizing GI registration processes and velopment of a GI takes place. The opportunities or the institutional mechanisms that shape collective efforts, limitations that individuals face in a given situation, the risks and benefits of this process among the interaction information acquired, the benefits they would accrue or of various supply chain actors (Paus and Reviron, 2010) be excluded from and how they rationalize a situation and institutional diversity (Bowen and Zapata, 2009). are all affected by the rules or the lack of rules that Thus, we aim to get empirical insights on the GI regis- frame an event (Ostrom, 2005). Ostrom (1990) and tration processes and the associated efforts, risks and Ostrom and Polski (1999) claim that all efforts to organize benefits of the producers’ collective action. The aims of collective action must address a common set of problems, the paper are: such as coping with free-riding or monitoring individual compliance with GI rules. As GI enterprises also (1) to identify the types of public and private actors who manage the common reputation of their regional are involved along GI registration processes in the EU, product and protect it from free-riding, we opted for the (2) to estimate and compare efforts, risks and benefits long-standing IAD framework designed for the institu- they perceived during the registration process and tional analysis of self-organized common-pool resource (3) to identify the link between the GI registration management (Ostrom et al., 1994; Hess and Ostrom, process and the success of the GI initiative in terms 2007). of GI use by enterprises. The IAD framework distinguishes key variables that We present the theoretical framework and methods that researchers use to assess the role of institutions in guide our research in the following section. In the Results shaping human interactions and decision-making pro- section, we illustrate the analysis of the registration pro- cesses. Thus, following the IAD framework’s variables cesses and the collective efforts, risks and benefits of two (Ostrom et al., 1994; Ostrom and Polski, 1999; Hess cases from Italy and Austria. In the Discussion, we and Ostrom, 2007) and GI literature, the relevant categor- compare and discuss the case studies’ results. We end ies of analysis regarding the contextual and institutional with the Conclusion. situation include: (1) The link of the product to the territory (analog to the Theoretical framework and methods bio-physical characteristics as defined by Hess and Ostrom 2007). Here, it is necessary to understand Following the research carried out by Quiñones-Ruiz the concept of ‘terroir’ argued by Casabianca et al. et al. (2014), the comparative study of the two GI registra- (2005). Terroir is defined as a geographical boundary, tion processes in Italy and Austria is guided by the in which a community has constructed—through Institutional Analysis and Development (IAD) frame- history—an intellectual and collective know-how of work (Ostrom et al., 1994; Ostrom, 2005; Hess and production, which is based on a system of interactions Ostrom, 2007) as well as an analytical scheme that struc- between a physical and biological environment to- tures the analysis of efforts, risks and benefits of participa- gether with human factors that reveal originality, tory processes (North, 1990; Allen, 1991; Penker and confer typicality and engender a reputation for a Klemen, 2010). product. (2) The attributes of the community of producers and The IAD framework other actors involved in the GI production, with a special focus on representative organizations. GIs and the reputation they incorporate
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